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Ed Miliband to make keynote speech in Bedford

Labour leader Ed Miliband is to make a keynote speech on the economy in Bedford Photo: Joe Giddens/PA Wire/Press Association Images

The Labour leader Ed Miliband is in Bedford today where he expected to say that Britain's economy will not recover as long as the living standards of ordinary working families continue to be "squeezed".

He will issue a renewed call for a temporary VAT cut to kick-start the economy, with the reversal of last year's Budget cut in the 50p top rate of tax.

His intervention comes after the Bank of England warned yesterday that the pressure on living standards looks set to continue for another three years with inflation forecast to remain above target until early 2016.

Speaking in Bedford, where Conservative prime minister Harold Macmillan made his famous "You've never had it so good" speech in 1957, Mr Miliband will say millions now fear they will "never have it so good again".

He will point to figures showing that over the past three decades, half the population had earned less than 15p in every additional pound Britain had made while 24p had gone to the top 1% of earners.

While he will acknowledge that Britain needs successful entrepreneurs, he will accuse Mr Cameron and Mr Osborne of failing to grasp that economic recovery will be made "by the many, not just by a few at the top".

"We believe that our economy will only prosper when the vast majority of the people of this country prosper too," he is expected to say.

"We believe it is when working families have confidence and security, when they can invest in their future, and when they can start businesses of their own that Britain will succeed.

"The 'squeezed middle' has never been so squeezed - and it looks like it will be that for years to come. It's no wonder our economy isn't growing when people can't afford to buy the things that British businesses try to sell.

"Now, we need very successful entrepreneurs in Britain. Making profits, being rewarded. But we can't succeed as a country just by hoping wealth will trickle down from those at the top to everyone else: our economy won't turn around that way."